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Dee-Nice
November 10, 2023
Solved

Reconciliation Discrepancies

  • November 10, 2023
  • 2 replies
  • 17 views

We have a new account that seems to have discrepancies in their bank reconciliations. There are deposits that were cleared but are not in bank statements. Also, there are deposits that are dated the prior month in QBs, but are in the current month bank statement and was cleared in current month... I really don't want to unreconcile the past 4 months BUT I have a feeling I am going to have to in order to correct all of this. Any thoughts? 

Best answer by FateCandylaneT

Reconciling accounts without any discrepancies is a need so you can get back to business, Dee-Nice. I see how relevant this is to ensure balances and transactions recorded are accurate in your file.

 

For the deposits that are cleared but aren't in your bank statements, it might be that these entries haven't cleared your bank yet. If these are cleared in your bank registers, just ensure these are included in your reconciliation with the correct period. Also, it's best to accurately follow the data on your real-life bank statements to make sure the amount balances are accurate.

 

To be guided on how to rectify reconciling issues, we suggest securing a backup copy of your company file and running the Reconciliation Discrepancy report to keep track of the transactions recorded. You may check out this reference for more detailed insights: Fix issues when you're reconciling in QuickBooks Desktop.

 

However, if you need help identifying and reviewing data from your past reconciliation, you can get reports for previous reconciliation to help fix your current accounting month. 

 

Additionally, we recommend consulting your accounting professional to seek additional guidance in handling these discrepancies.

 

I've added this helpful resource if you encounter incorrect balances on your account: Fix beginning balance issues in QuickBooks Desktop.

 

We'll keep this thread available so you can always get back and leave a reply below for any additional questions or other QuickBooks-related concerns. Feel free to let us know, and we'll be sure to get you covered. Have a good one!

2 replies

F
FateCandylaneTQuickBooks TeamAnswer
QuickBooks Team
November 10, 2023

Reconciling accounts without any discrepancies is a need so you can get back to business, Dee-Nice. I see how relevant this is to ensure balances and transactions recorded are accurate in your file.

 

For the deposits that are cleared but aren't in your bank statements, it might be that these entries haven't cleared your bank yet. If these are cleared in your bank registers, just ensure these are included in your reconciliation with the correct period. Also, it's best to accurately follow the data on your real-life bank statements to make sure the amount balances are accurate.

 

To be guided on how to rectify reconciling issues, we suggest securing a backup copy of your company file and running the Reconciliation Discrepancy report to keep track of the transactions recorded. You may check out this reference for more detailed insights: Fix issues when you're reconciling in QuickBooks Desktop.

 

However, if you need help identifying and reviewing data from your past reconciliation, you can get reports for previous reconciliation to help fix your current accounting month. 

 

Additionally, we recommend consulting your accounting professional to seek additional guidance in handling these discrepancies.

 

I've added this helpful resource if you encounter incorrect balances on your account: Fix beginning balance issues in QuickBooks Desktop.

 

We'll keep this thread available so you can always get back and leave a reply below for any additional questions or other QuickBooks-related concerns. Feel free to let us know, and we'll be sure to get you covered. Have a good one!

    Rainflurry
    Rainflurry
    Level 11
    November 10, 2023

    @Dee-Nice 

     

    "There are deposits that were cleared but are not in bank statements."

     

    You will need to reverse those deposits with an expense or check transaction in the current month.  Assign the same account to the check/expense that was used on the deposit transactions cleared in QB that never hit the bank account. 

     

    "Also, there are deposits that are dated the prior month in QBs, but are in the current month bank statement and was cleared in current month... I really don't want to unreconcile the past 4 months BUT I have a feeling I am going to have to in order to correct all of this. Any thoughts?"

     

    That's normal.  Deposits often hit the bank account in a month following the month they are dated in QB.  Is there something I'm missing?  

    D
    Dee-NiceAuthor
    November 11, 2023

    I would understand if the bank would take about 1 to 2 days to process a deposit but… Let me give you an example; March bank statement was reconciled. Reviewed the reconciliation detail report and found deposits that were dated in February 26th, 27th or 28th, but on the bank statements, these deposits didn’t happen until March 24th… SO why would the previous office person think it is ok to clear deposits with wrong dates? I have an idea as to why they would do this and it’s WRONG. I am leaning towards unreconciling this entire year and changing dates to reflect CORRECT deposit dates and reconcile accurately. 

    Rainflurry
    Rainflurry
    Level 11
    November 11, 2023

    @Dee-Nice 

     

    "SO why would the previous office person think it is ok to clear deposits with wrong dates? I have an idea as to why they would do this and it’s WRONG."

     

    They way they did it doesn't need to be fixed IMO.  If you know all of this, forgive me.  It really depends on how the deposits are being recorded in QB and whether the business is on cash or accrual basis.  The only reason I see to change the deposit date is if they use undeposited funds.  But, even then, it really doesn't matter since the balance sheet will show the cash in the bank account vs. undeposited funds.  Both are listed in the asset section of the balance sheet.    

     

    If they don't use undeposited funds, then the date of the deposit will be the same date as the payment received date, regardless of when the actual deposit is made and you don't want to "fix" that because what matters from an accounting (and the IRS's) perspective is the date you receive the money without restriction.  It's what's known as 'constructive receipt'.  So, if they aren't using undeposited funds, and the deposit sits around the office for a few weeks, there's going to be a discrepancy between the deposit date in QB and the deposit date on the bank statement.  If the business is on cash basis and you change the deposit date, you could potentially be shifting income.  For example, say your client received an invoice payment of $10K on Dec. 15, and didn't use undeposited funds but recorded the payment receipt as deposited directly into the bank account.  They got lazy and didn't deposit the check until Jan. 5.  If the client is a cash basis taxpayer, changing the deposit date from Dec. 15 to Jan. 5 will shift the $10K in income to January, thereby under-reporting their income for the year.  That income and deposit should both be booked on Dec. 15.  So, bottom line, I can't see any reason to "fix" this.   

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